The Two-Way

8:50 am

Mon April 2, 2012

Irish Protest Against Household Tax As Austerity Pain Bites Further

Phyllis O'Toole joined an estimated 5,000 demonstrators in the streets of Dublin on Saturday (March 31, 2012).

Shawn PogatchnikAP

House prices have crashed. Banks and businesses have failed. Jobs have been axed. People are struggling to make the mortgage.

The Republic of Ireland's 4.6 million people have suffered considerably since the financial crisis began four years ago, forcing their government to turn to the European Union and International Monetary Fund for a $90 billion bail-out.

Yet the Irish have, for the most part, endured the pain and taken the medicine — a mighty dose of tax increases and spending cuts — compliantly enough to earn plaudits for their country in Brussels as the "poster child of austerity".

Is that now about to change?

This weekend, Ireland's 1.65 million householders were supposed to register to pay a new tax; an annual household charge of 100 Euros. That's about $133. By the time the deadline expired at midnight Saturday, only about half had done so.

Hundreds of thousands now face the prospect of penalties and, potentially, prosecution. Is a tax revolt in the making, that could disupt the government's strategy for getting the economy back on its feet — and make it still harder to implement future austerity measures?

The introduction of the household tax, as part of the EU/IMF deal, has triggered a protest campaign led by community and political activists, who are calling for a boycott. They seem to have struck a nerve. Thousands of people took part in what seems to have been an unsually angry demonstration on Saturday in Dublin, waving banners bearing the slogans "Can't Pay, Won't Pay" and "When The Bankers Pay, We'll Pay!".

Opponents of the tax say it is regressive because the rich pay the same as the poor. The public's indignation is being fueled by the common perception in Ireland that a corrupt super-rich elite — bankers, politicians and property developers — destroyed the economy, yet have largely gone unpunished.

The government has so far refused to extend the deadline and is insisting late-payers must now pay penalties. An intriguing stand-off seems to be developing.

All this is happening as Ireland prepares for a referendum, on May 31, on the European Union's new fiscal pact. It's a poll that will breathe still more fire into the national debate among the Irish about whether they should carry on obediently swallowing their bitter austerity medicine.

(NPR correspondent Philip Reeves covers the news in Europe from his base in London.)